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Whistleblower and Other Tips Pouring in to OMI, the SEC's 'Central Intelligence Office'

Bruce Carton | May 23, 2012

On the DealBook blog this week, Ben Protess and Azam Ahmed have an interesting update on developments in the SEC's Office of Market Intelligence. As I discussed in this post back in February 2010, OMI has been a pet project of SEC Enforcement Director Robert Khuzami's since he joined the SEC in early 2009. It was created to oversee and drastically improve upon the SEC's “collection, analysis, risk-weighing, triage, referral, and monitoring of the hundreds of thousands of tips, complaints, and referrals that the agency receives each year,” Khuzami said in a 2009 speech.

The office began to take shape in January 2010, when the SEC announced that Thomas Sporkin had been appointed to lead the office. It quickly gained a staff of approximately 30 people by combining all personnel in the SEC's existing Office of Market Surveillance and Office of Internet Enforcement. Two years later, Sporkin told DealBook, OMI has succeeded in becoming "the central intelligence office for the whole agency.” 

Some interesting facts about OMI from the DealBook article:

  • Sporkin's OMI team has now grown to more than 40 former traders, exchange experts, accountants and securities lawyers.
  • OMI staff go through roughly 200 "pieces of intelligence" each day, and prepare a daily “intelligence report” that presents the hottest tips.
  • OMI has its own “market watch room” that includes technology such as Bloomberg terminals and real-time stock pricing monitors.

According to On Wall Street, the SEC's new whistleblower program is now the source of approximately seven tips per day. Sporkin says that two to three of these daily whistleblower tips are typically “high quality'' and often come from competitors or knowledgeable high-level industry executives or managers.